THE KYC PORTAL COMPLIANCE COMMUNITY – SETTING THE REGULATORY BENCHMARK

Jun 9, 2017

Overregulation is a clear and present hurdle faced by financial institutions worldwide – any number of recent surveys and polls show that anything between 65-85% of C-suite executives list the regulatory burden as their single biggest headache.

Whilst organisations actively strive to remain fully compliant, in the face of serious financial and legal sanctions, it is clear that there are multiple disconnects that FinServ operators have to face. Individuals within risk and fraud teams can and do tend to grow increasingly complacent by not properly assessing the actual risk posed by incorrect assessments – both when levying too many checks as well as when regarding the KYC and ongoing monitoring processes as simple exercises in ticking boxes. Equally, regulatory impositions are often written in vague, intentionally non-specific language, leaving the door open to interpretation and individual determination, which in turn invariably leads to one of two scenarios – levying too many checks on customers, to the detriment of profitability and leading to the loss of business to less stringent competition, or conversely, an approach that is riddled with cracks and loopholes that simultaneously open up the company to the real threat of unmitigated risk and subsequent, hefty fines.

That today’s businesses are operating in an ever more regulated environment is a realty that holds particularly true in the financial sector and needs to be dealt with efficiently and effectively. One may argue that regulations are meant as generic guidelines encompassing a multitude of sectors and industries and that self-regulation is actually healthy and beneficial, rather than facing situations as has repeatedly happened in subsequent transpositions of EU directives governing the sector where a one-size-fits-all approach clearly was at the detriment of smaller operators.

However, quite logically the obverse also holds true. Taking, as an example, directives countering money-laundering, the imposition to ascertain origin and flow of funds HAS to be correct, complete and timely, regardless of the actual value transacted, or the size, reach and means of the operator.

The one question hounding operations has to date been: “where do my regulatory impositions end and my commercial obligations towards my shareholders and customers start?” Faced with the very real prospect of crippling penalties or worse, unplanned risk, erring on the side of caution is naturally the easy, if not only way out.

Effectively translating into haphazardly required additional documentary evidence, lines of questioning and increasing onus placed on customers, this approach is directly contributing to longer on-boarding times, increases in costs and above all disgruntled customers, who in the majority have been found to be unhappy to seriously disgruntled with the process and would consider leaving to the next competitor.

This lack of uniformity across operators is tangible and real, and while one might readily dismiss more streamlined, less invasive lines of ascertaining and monitoring as being too lax and non-compliant, the very generic nature of the regulations manages to shed exactly no light on the correct route to take.

In addressing the inefficiencies inherent to the practices governing the compliance sector, the KYC Portal platform, launched in late 2016, already delivers a unique set of ground-breaking innovations that help streamline the entire compliance process: from the delegation of document collection, custom automated risk score calculations allowing for zero human input in the on-boarding of all customers and the equally system-determined acceptance of low-risk subjects (allowing organisations to refocus their expertise where it really matters), automating the ongoing reviews of customer accounts, minimising exposure to risk to a single day and reducing costs by over 60%.

At the Harnessing FinTech Innovation in Retail Banking event in London, this June 7th, Aqubix, creators of KYC Portal are introducing the revolutionary Compliance Community. Taking the cue from compliance experts’ requests to help them determine the correct course of action when setting up the bespoke rules and regulations governing KYC Portal, the Compliance Community portal allows the anonymous cross-checking across jurisdictions, industries and dataset types with free text searches to determine specifically what single or multiple operators are collecting, how they structure their data and what requirements they place on single customers.

The Compliance Community allows users of KYC Portal to compare all the configuration data and rules governing individual programme setups across all other users, in any jurisdiction, industry or program type. Access is granted after having in turn shared their own setup in a totally anonymous fashion, opening up a world of opportunities through which operators can finally come to terms on whether they are doing too much or to little at the expense of impacting their business objectives.

Offering the ability to drill down datasets granularly, users can query any variable, rule or parameter across participating operators’ configurations, including entities, the fields collected on each entity, respective scoring risks, questionnaires and related scored answers and also mandate documents and checklists. The Compliance Community allows operators to determine what volume of data should be collected, how risk is being perceived and calculated, the type and extent of mandated documentary evidence being required, the construction and depth of profiling questionnaires and associated result scores.

In addition, users can, always in total anonymity, query directly the author being referenced, allowing for ongoing communication that in turn contributes to a uniform approach across all sectors, effectively creating homogeneous benchmarks based on actual processes that are being implemented in the industry.